Both countries have taken steps to tighten border security, earning them a month-long reprieve from tariffs that could wreak havoc on the highly integrated U.S. economy.
Canada and Mexico are expected to step up efforts this week to avoid 25% tariffs on their exports to the United States in talks to persuade the Trump administration that its measures to boost border security and curb fentanyl trafficking are working ahead of a March 4 deadline.
Canada and Mexico have taken steps to tighten border security, earning them a month-long reprieve from tariffs that could wreak havoc on the highly integrated North American economy.
This week’s negotiations, along with new reports from the Department of Homeland Security, will help determine whether the Trump administration extends the tariff suspension for longer, said Dan Ujczo, a lawyer specializing in U.S.-Canada trade issues.
Even if that happens, he said, Trump will likely maintain the tariff threat at least until there is clear evidence that border measures are stemming the flow of migrants and fentanyl.
"There is progress being made on the security front," said Ujczo, a senior attorney at Thompson Hine in Columbus, Ohio. "But it's overly optimistic to think that those tariffs will be completely rescinded."
The White House, the U.S. Trade Representative's office and the Commerce Department did not respond to requests for comment on negotiations expected this week ahead of a March 4 deadline to implement the tariffs, which would apply to more than $918 billion worth of U.S. imports from both countries, ranging from autos to energy.
MORE TARIFF THREATS
Since initially threatening 25% tariffs and imposing a 10% rate on all Chinese imports, Trump has piled on more tariff measures that could cloud border negotiations.
These include substantially increasing tariffs on steel and aluminum to a flat 25%, rescinding long-standing exemptions for Canada and Mexico, the largest sources of U.S. imports of the metals. These steep increases, which also extend to hundreds of steel-based products, will take effect a week after the border tariffs, on March 12.
Trump has also said he wants to impose 25% tariffs on imports of cars, pharmaceuticals and semiconductors, as well as order "reciprocal" tariffs to match other countries' tax rates and trade barriers.
The threat of tariffs could trigger an early renegotiation of the US-Mexico-Canada trade deal, scheduled for 2026, Ujczo added.
Trump signed the USMCA into law in 2020 after renegotiating the 1994 North American Free Trade Agreement (NAFTA), but has increasingly expressed dissatisfaction with auto imports from Mexico and Canada.
ADVANCES CITED
Mexican Economy Minister Marcelo Ebrard said Thursday he had a "constructive dialogue" during a meeting with Trump's top trade officials, including Commerce Secretary Howard Lutnick, White House economic adviser Kevin Hassett and U.S. Trade Representative nominee Jamieson Greer.
Ebrard said in a post on X that "joint work" on trade matters with the United States begins on Monday.
Mexico has begun deploying up to 10,000 National Guard troops to its northern border as part of the deal that Mexican President Claudia Sheinbaum said also calls on the United States to work to stem the flow of firearms into Mexico.
Canada earlier this month created a new position to coordinate the fight against fentanyl smuggling, appointing senior intelligence official Kevin Brosseau.
Ottawa has also reclassified drug cartels as terrorist entities and deployed drones, helicopters and other surveillance technology along the United States' sprawling northern border.
In December, the Canadian government announced a C$1.3 billion ($913 million) increase in border security spending in response to Trump's tariff threat.
Canadian Prime Minister Justin Trudeau has remained in close contact with Trump on border issues in recent days, including in a call Saturday that included discussions about joint efforts to curb the fentanyl trade.
Trudeau has threatened retaliatory tariffs on C$155 billion (US$107 billion) worth of American products including beer, wine, bourbon and orange juice from Florida, but said last week that Canada is "going to do the work" to ensure no tariffs are imposed.
OBSTACLES
White House officials say Canada, Mexico and China are gateways into the United States for fentanyl and its precursor chemicals in small, uninspected packages.
A major hurdle to stemming these shipments is a pause in Trump's abrupt order to suspend the "de minimis" duty-free exemption for packages valued at less than $800 from the three countries because there were no procedures in place to screen the millions of low-value express packages arriving at U.S. airports every day.
It's unclear when the U.S. Customs and Border Protection agency will be able to close the de minimis loophole again. Trump's initial executive order on fentanyl and border tariffs directed Homeland Security Secretary Kristi Noem to regularly brief Trump and Congress on the crisis.
